Global stocks pull back from 6-week highs, euro slips

Oil and higher-yielding currencies shrank from multi-week highs on Tuesday and Asian stocks drifted lower as investors paused in their recent chase for riskier assets.

Investors appeared to be searching for reasons to stump up more money as a buoyant mood the previous day wore off, and some traders said this was an opportunity to take profits.

The MSCI index of Asian shares outside Japan slipped 0.3 percent, after having hit its highest level in over six weeks on Monday, lifted by encouraging U.S. economic data last week.

Commodity markets were also subdued. Oil prices fell 0.5 percent, off Monday's eight-week highs, as investors awaited industry data expected to show another rise in U.S. crude inventories.

In Tokyo, the Nikkei stock average was flat, having also hit six-week highs the previous day.

We may be close to a short-term peak right now, said Yutaka Miura, a senior technical analyst at Mizuho Securities in Tokyo.

Given a lack of reasons to really push the Nikkei higher and the fact that it rose over 200 points yesterday, this is a good level for a bit of profit-taking.

Price performances for the year suggest investors remain cautious and somewhat wary of riskier assets even as a global recovery appears to slowly gather steam.

The MSCI index of Asian shares outside Japan is down 0.7 percent so far this year. Likewise, the Australian dollar, an investor favorite among riskier, higher-yielding currencies, currencies, is up just 1.3 percent.

In contrast, safe-haven assets such as the yen and gold are up 3.1 percent, and 2.5 percent respectively.

Yet for the rest of 2010, Bank of America-Merrill Lynch argues the risk is for equity prices to be surprisingly strong.

Noting that Tuesday is the one-year anniversary of the S&P 500's 13-year closing low, and that the index has rallied almost 70 percent since, the bank argued that history shows stock prices continue to climb in the second year after a bear market.

Only once was 'year two' a year of negative return, it said, referring to the early 1930s bear market. It said the average gain in the first year of recovery is 46 percent, followed by 9 percent in the second year.

The pull-back on Tuesday benefited the U.S. dollar and yen, which are favored as safer investments in the currency market.

The U.S. dollar index edged up to 80.500, with resistance lurking around its February high of 81.34. The yen was firm against the U.S. dollar at 90.02.

The euro, still plagued by concerns about Greece's fiscal crisis, drifted lower to $1.3616.

Greek Prime Minister George Papandreou tried again on Monday to contain the crisis and shore up support for Greece.

He urged the Group of 20 nations to go after market speculators, who he blamed for raising Greece's borrowing costs by betting the country may default on its debts.